Lack of Written Opinion Leaves Infringer Exposed in the Crosswalk

In Polara Engineering Inc. v. Campbell Company, [2017-1974, 2017-2033] (July 10, 2018), the Federal Circuit affirmed in part, vacated in part, and remanded the district court’s determination that claims 1-4 of U.S. Patent No. 7,145,476 on accessible pedestrian signal systems were valid and willfully infringed, and awarding enhanced damages.

Cambell argued on appeal that the claims were invalid of prior public uses and over the prior art.  Regarding the public uses, the Federal Circuit noted that an inventor who seeks to perfect his discovery may conduct extensive testing without losing his right to obtain a patent for his invention—even if such testing occurs in the public eye.  A use may be experimental if its purpose is to test claimed features of the invention or to determine whether an invention will work for its intended purpose.  The Federal Circuit found that that substantial evidence supported the jury’s finding of experimental use that negates application of the public use bar, noting that testing to perfect features inherent to the claimed invention, such as durability qualifies as experimental, and that in any event the testing did relate to claimed features.  While there was evidence that the testing involved commercial features, rather than claimed features, the Federal Circuit could not say that the jury’s finding of experimental use lacked substantial evidentiary support.

Regarding invalidity over the prior art, the Federal Circuit agreed that Campbell was estopped from arguing that the district court erred in its claim construction instruction
because the court adopted Campbell’s proposed construction of “digital data signals.”  The Federal Circuit found substantial evidence for the jury’s implied fact finding.

On the issued of enhanced damages, the Federal Circuit noted that enhanced damages are designed as a “punitive” or “vindictive” sanction for egregious
infringement behavior, and found that substantial evidence supports
the jury’s finding of willful infringement.  The Federal Circuit said that the jury reasonably could have found that Campbell intentionally copied the ’476 patent despite a significant known risk that its two-wire AAPS would infringe the ’476 patent, having been advised by counsel that there were “areas of potential conflict.”  While Campbell argued that it relied upon competent opinion of counsel,  the Federal Circuit said that Campbell “has not pointed to any documentary or third-party evidence showing it received an opinion of counsel,” and the jury was entitled not to credit the testimony that there was such an opinion.  While Campbell’s challenge that the jury instruction did not specify the time period during which Campbell’s conduct was willful may have had merit, Campbell waived this challenge by agreeing to a simple yes or no instructions.

Finally, on the amount of enhanced damages (the district court used a multiplier 2 1/2), the Federal Circuit said that the district court awarded almost the maximum amount
of enhanced damages, but did not adequately explain its basis for doing so, and failed to even mention Campbell’s public use defense, which presented a close question in
this case.  The Federal Circuit found that the district court may have erred in its consideration of Campbell’s public use defense, and vacated the award of enhanced damages and remanded.